How the Nation's Health Care System Has Changed Over the Past 2 Centuries

Evolution of the Modern American Health Care System

Today, the United States spends more on health care per capita than any other industrialized country, but many critics charge that American taxpayers are not getting enough “bang for their health care bucks.” Indeed, health care accounts for a major percentage of the nation’s gross domestic product, estimated at 17.8% in 2021, which was almost twice as much as the average Organization for Economic Co-operation and Development country. In fact, just 60 years ago, health care accounted for only 5% of the nation’s GDP (Nunn et al., 2020), and per capita health care expenditures in the United States today are almost twice as much per year compared to the nearest country, Germany, and a whopping four times higher compared to South Korea (Gunja et al., 2023). Nevertheless, most Americans are far more fortunate today compared to their counterparts from just a few decades ago when health care in the United States was less accessible and evidence-based and far more likely to result in suboptimal clinical outcomes. To determine how the nation reached this point, the purpose of this paper is to provide a review of the relevant literature concerning the evolution of the modern American health care system, including changes in medical expenditure, policy, and health care economics. Following this review, the paper provides a summary of the research and the significant findings that emerged from the literature in the conclusion.

Review and Discussion

The evolution of health care in the United States has been characterized by continued improvements in the delivery of services against a backdrop of capitalistic thinking that has created a unique health care system in the world today. For example, the bloody battlefields of the Civil War provided physicians of the era with unprecedented experience in surgical procedures and rehabilitative care which served to advance the profession in ways that would not have been possible otherwise. On the other hand, though, universal health care remains out of reach for far too many Americans today. In this regard, Griffin (2020) reports that, “While the Civil war propelled the progress of American medicine much faster than what would have probably transpired without it, our staunch belief in capitalism has prevented us from developing national healthcare” (para. 3). Consequently, the evolution of the modern American health care system has created a uniquely hybrid model that stands apart from other affluent nations. As Griffin points out, “We have our own unique system that has evolved drastically over the past century into something that is both loved and hated by its citizens” (2020, para. 4).

These mixed opinions are readily understandable given the high stakes that are involved, but the fact remains that the nation’s health care network has undergone incremental changes and gradual improvements, most especially since the fin de siècle. Moreover, there have also been fundamental changes in the way doctors and other health care practitioners have been paid over the past two hundred years. For instance, in the early 18th century America, there were significant differences in the way backwoods doctors and city doctors were paid. Backwoods doctors in the early U.S. who practiced in rural areas or on the frontier, were typically paid in goods or services rather than in cash. Doctors might receive payment in the form of crops, livestock, or other goods or services that their patients produced (Mann et al., 1985).

By sharp contrast, doctors practicing in major urban centers were more likely to be paid in cash. These doctors typically charged higher fees than backwoods doctors and frequently served more affluent clientele. In addition, city doctors might also have been able to charge more for their services because they had access to more advanced medical knowledge and equipment. It is important to note, however, that these were general trends in health care expenditures and such practices varied depending on a number of factors, including most especially the medical skills of the physicians involved. During the early 20th century, U.S. presidents began a long series of efforts to improve American health care practice and standards, but proposed changes over the past century or so have largely failed to achieve the desired outcomes due in large part to the increasing politicization of health care in the U.S. as characterized by extensive legislation and the creation of numerous government agencies resulting in unintended consequences and increased costs without improving the overall quality of health care services (Dorrance et al., 2018).

There were also some changes in how health care was paid prior to mid-20th century. During the first half of the 20th century, doctors in the United States were typically paid on a fee-for-service basis, meaning that doctors charged patients directly for each individual service they provided (e.g., an office visit, diagnostic test, or surgical procedure). During this period in American history, patients usually paid for these services themselves, and there was little to no insurance coverage for healthcare expenses (in fact, Blue Cross was not introduced until 1932) (Mosely, 2008). During this period, doctors were usually self-employed and operated their own practices, either alone or in small groups. Physicians established their own medical fees and were responsible for billing and collecting payment from patients (Mosely, 2008). In some cases, doctors provided free or reduced-cost services to patients who were unable to pay, while others relied on charitable organizations or government programs to subsidize their services. Likewise, hospitals were also typically run as private institutions, and patients were responsible for paying for their care directly. However, some hospitals provided charity care to patients who could not afford to pay, and many were supported by donations from wealthy individuals and organizations (Mosely, 2008).

Although the process is complex and rife with diverse opinions concerning how best to improve the nation’s health care system at present, a number of challenges remain unresolved. For example, according to a seminal study by Conklin (2002), “Today's health care system is not only complex, it is significantly different from ‘what it used to be’” (p. 6). In many cases, the challenges that are involved as based on economics, but in other there are cultural and social priorities that have also played a role in shaping the nation’s health care system over the past half century (Conklin, 2002). The introduction of Medicare and Medicaid in 1965 helped make health care services more affordable and accessible for low-income consumers as well as the elderly and disabled (Baldwin, 2021).

More recently, managed care plans became more prevalent during the 1980s and 1990s which served to control health care costs but also limited patient choice in some cases. Likewise, there was also an expansion of employer-sponsored health insurance which resulted in a shift away from direct payment by patients for healthcare services. Finally, the Affordable Care Act was passed in 2010 which expanded access to health insurance coverage, required individuals to have health insurance, and implemented various cost-containment measures (Kim, 2022).

Conclusion

The research showed that the evolution of the US healthcare system has been marked by a series of policy changes, economic transformations, and technological advancements. While progress has been made in expanding access to healthcare coverage and improving the quality of care, relentlessly rising health care costs remain a significant challenge for policymakers, providers, and patients alike. In the final analysis, it is reasonable to conclude that U.S. taxpayers will continue to pay far more for their health care services that their counterparts in other industrialized nations unless and until lawmakers take substantive action to effect the meaningful changes that are needed to reduce costs and improve accessibility for all American health care consumers.